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Lagarde acknowledged the decline would take longer than the ECB had initially expected but said favourable financing conditions created by its ultra-easy policy were still essential for the euro zone economy to recover from the COVID-19 pandemic.

"We see inflation rising further in the near term but then declining next year," Lagarde told a news conference after the ECB left policy on hold.

She identified the main drivers of inflation as energy prices and snarled supply chains as consumer demand recovers and base effects, especially from last year's German value-added tax cut, the impact of which should drop out of data in January.

Euro zone inflation hit 3.4% last month and is seen rising to 3.7% in October in flash estimates due to be released on Friday.

This has raised questions about whether the ECB's aggressive policy of massive bond purchases and negative rates on deposits was still appropriate.

Lagarde said inflation had dominated the Governing Council's discussions."We talked about inflation, inflation, inflation," she said.